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A09116 Summary:

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A09116 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         9116--A
 
                   IN ASSEMBLY
 
                                    January 25, 2012
                                       ___________
 
        Introduced  by  M. of A. MARKEY, WEISENBERG, SWEENEY, STEVENSON, ZEBROW-
          SKI, GUNTHER, SCHIMEL,  BENEDETTO,  ORTIZ,  COLTON,  HIKIND,  BRONSON,
          BOYLAND,  JAFFEE,  COOK,  SCARBOROUGH,  LAVINE,  M. MILLER, ROBERTS --
          Multi-Sponsored by -- M. of A. AUBRY, CUSICK, McENENY, REILLY,  ROBIN-
          SON -- read once and referred to the Committee on Governmental Employ-

          ees  --  committee  discharged,  bill  amended,  ordered  reprinted as
          amended and recommitted to said committee
 
        AN ACT to amend the general municipal law and the retirement and  social
          security  law,  in  relation  to increasing certain special accidental
          death benefits
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subdivision  c  of section 208-f of the general municipal
     2  law, as amended by chapter 161 of the laws of 2011, is amended  to  read
     3  as follows:
     4    c.  Commencing  July  first,  two thousand [eleven] twelve the special
     5  accidental death benefit paid to a widow  or  widower  or  the  deceased
     6  member's  children under the age of eighteen or, if a student, under the

     7  age of twenty-three, if the widow or widower has died,  shall  be  esca-
     8  lated  by  adding  thereto an additional percentage of the salary of the
     9  deceased member (as increased pursuant to subdivision b of this section)
    10  in accordance with the following schedule:
    11       calendar year of death
    12       of the deceased member              per centum
    13            1977 or prior                    [173.2%] 181.4%
    14            1978                             [165.2%] 173.2%
    15            1979                             [157.5%] 165.2%
    16            1980                             [150.0%] 157.5%
    17            1981                             [142.7%] 150.0%
    18            1982                             [135.7%] 142.7%

    19            1983                             [128.8%] 135.7%
    20            1984                             [122.1%] 128.8%
    21            1985                             [115.7%] 122.1%
    22            1986                             [109.4%] 115.7%
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13981-04-2
        A. 9116--A                          2
 
     1            1987                             [103.3%] 109.4%
     2            1988                              [97.4%] 103.3%

     3            1989                              [91.6%] 97.4%
     4            1990                              [86.0%] 91.6%
     5            1991                              [80.6%] 86.0%
     6            1992                              [75.4%] 80.6%
     7            1993                              [70.2%] 75.4%
     8            1994                              [65.3%] 70.2%
     9            1995                              [60.5%] 65.3%
    10            1996                              [55.8%] 60.5%
    11            1997                              [51.3%] 55.8%
    12            1998                              [46.9%] 51.3%

    13            1999                              [42.6%] 46.9%
    14            2000                              [38.4%] 42.6%
    15            2001                              [34.4%] 38.4%
    16            2002                              [30.5%] 34.4%
    17            2003                              [26.7%] 30.5%
    18            2004                              [23.0%] 26.7%
    19            2005                              [19.4%] 23.0%
    20            2006                              [15.9%] 19.4%
    21            2007                              [12.6%] 15.9%
    22            2008                               [9.3%] 12.6%

    23            2009                               [6.1%] 9.3%
    24            2010                               [3.0%] 6.1%
    25            2011                               [0.0%] 3.0%
    26            2012                               0.0%
    27    § 2. Subdivision c of section 361-a of the retirement and social secu-
    28  rity  law,  as amended by chapter 161 of the laws of 2011, is amended to
    29  read as follows:
    30    c. Commencing July first, two thousand  [eleven]  twelve  the  special
    31  accidental  death  benefit  paid  to  a widow or widower or the deceased
    32  member's children under the age of eighteen or, if a student, under  the
    33  age  of  twenty-three,  if the widow or widower has died, shall be esca-
    34  lated by adding thereto an additional percentage of the  salary  of  the

    35  deceased member, as increased pursuant to subdivision b of this section,
    36  in accordance with the following schedule:
    37       calendar year of death
    38       of the deceased member              per centum
    39            1977 or prior                    [173.2%] 181.4%
    40            1978                             [165.2%] 173.2%
    41            1979                             [157.5%] 165.2%
    42            1980                             [150.0%] 157.5%
    43            1981                             [142.7%] 150.0%
    44            1982                             [135.7%] 142.7%
    45            1983                             [128.8%] 135.7%
    46            1984                             [122.1%] 128.8%

    47            1985                             [115.7%] 122.1%
    48            1986                             [109.4%] 115.7%
    49            1987                             [103.3%] 109.4%
    50            1988                              [97.4%] 103.3%
    51            1989                              [91.6%] 97.4%
    52            1990                              [86.0%] 91.6%
    53            1991                              [80.6%] 86.0%
    54            1992                              [75.4%] 80.6%
    55            1993                              [70.2%] 75.4%
    56            1994                              [65.3%] 70.2%

        A. 9116--A                          3
 
     1            1995                              [60.5%] 65.3%
     2            1996                              [55.8%] 60.5%
     3            1997                              [51.3%] 55.8%
     4            1998                              [46.9%] 51.3%
     5            1999                              [42.6%] 46.9%
     6            2000                              [38.4%] 42.6%
     7            2001                              [34.4%] 38.4%
     8            2002                              [30.5%] 34.4%
     9            2003                              [26.7%] 30.5%
    10            2004                              [23.0%] 26.7%

    11            2005                              [19.4%] 23.0%
    12            2006                              [15.9%] 19.4%
    13            2007                              [12.6%] 15.9%
    14            2008                               [9.3%] 12.6%
    15            2009                               [6.1%] 9.3%
    16            2010                               [3.0%] 6.1%
    17            2011                               [0.0%] 3.0%
    18            2012                               0.0%
    19    § 3. This act shall take effect July 1, 2012.
          FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
          This  bill  would amend both the General Municipal Law and the Retire-

        ment and Social Security Law to increase the salary used in the computa-
        tion of the special accidental death benefit by 3% in  cases  where  the
        date of death was before 2012.
          Insofar  as  this bill would amend the Retirement and Social  Security
        Law, it is estimated that there would be an additional  annual  cost  of
        approximately  $390,000  above  the  approximately  $8.7 million current
        annual cost of this benefit. This cost would be shared by the  State  of
        New York and all participating employers of the New York State and Local
        Police and Fire Retirement System.
          Summary of relevant resources:
          Data:  March  31,  2011  Actuarial Year End File with distributions of
        membership and other statistics displayed in  the  2011  Report  of  the
        Actuary and 2011 Comprehensive Annual Financial Report.
          Assumptions  and  Methods:  2010  and  2011 Annual Report to the Comp-

        troller on Actuarial Assumptions, Codes Rules  and  Regulations  of  the
        State of New York: Audit and Control.
          Market  Assets and GASB Disclosures: March 31, 2011 New York State and
        Local Retirement System Financial Statements and Supplementary  Informa-
        tion.
          Valuations  of Benefit Liabilities and Actuarial Assets: summarized in
        the 2011 Actuarial Valuations report.
          I am a member of the American Academy of Actuaries and meet the Quali-
        fication Standards to render the actuarial opinion contained.
          This estimate, dated January 6, 2012 and intended for use only  during
        the  2012  Legislative  Session, is Fiscal Note No. 2012-43, prepared by
        the Actuary for the New York State and Local Police and Fire  Retirement
        System.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          PROVISIONS OF PROPOSED LEGISLATION - OVERVIEW:

          With  respect  to  the  City  of  New York (the "City"), this proposed
        legislation would amend General Municipal Law ("GML") Section 208-f.c to
        increase certain Special Accidental Death Benefits ("SADB") for line-of-
        duty widows/widowers and/or children of former  uniformed  employees  of
        the  City  and  the  New  York City Health and Hospitals Corporation and
        A. 9116--A                          4
 
        certain former employees of the Triborough Bridge and  Tunnel  Authority
        who were members of certain New York City Retirement Systems ("NYCRS").
          In  addition,  the  proposed  legislation  would  amend Retirement and
        Social Security Law Section 361-a.c  to  cover  such  SADB  for  certain
        survivors  of  deceased   members of the New York State and Local Police
        and Fire Retirement System.

          The Effective Date of the proposed legislation would be July 1, 2012.
          IMPACT ON BENEFITS - SADB RECIPIENTS: With respect to the  NYCRS,  the
        proposed  legislation would impact the SADB payable to certain survivors
        of members of the:
          * New York City Employees' Retirement System ("NYCERS"), or
          * New York City Police Pension Fund ("POLICE"), or
          * New York City Fire Department Pension Fund ("FIRE"), and
          who were employed by one of the following employers in  certain  posi-
        tions:
          * New York City Police Department - Uniformed Position,
          * New York City Fire Department - Uniformed Position,
          * New York City Housing Authority - Uniformed Position,
          * New York City Transit Authority - Uniformed Position,
          * New York City Department of Correction - Uniformed Position,
          *  New  York City - Uniformed Position as Emergency Medical Technician
        ("EMT"),

          * New York City Health and Hospitals Corporation - Uniformed  Position
        as EMT, or
          * Triborough Bridge and Tunnel Authority - Bridge and Tunnel Position.
          DESCRIPTION  OF  BENEFITS  PAYABLE:  Under  the GML, the basic SADB is
        defined to equal:
          The salary of the deceased member at the date of death (or, in certain
        instances, a greater salary based on rank or other status) ("Final Sala-
        ry"), less:
          * Any death benefit is adjusted by any Supplementation or Cost-of-Liv-
        ing Adjustment ("COLA") paid by the NYCRS to the member's survivors,
          * Any death benefit paid by Social Security to the member's survivors,
        and
          * Any Worker's Compensation benefit paid to the member's survivors.
          The SADB is paid to the deceased member's surviving widow or  widower,
        if alive. If the widow/widower is no longer alive, then the SADB is paid

        to  the deceased member's children until age eighteen or while attending
        school until age twenty-three.
          The GML also provides that the SADB is subject to escalation based  on
        the  calendar year of death of the member. Each year since Calendar Year
        1977 the SADB has been increased by  an  additional  cumulative,  incre-
        mental  percentage  of  Final  Salary. For example, for a covered member
        deceased in Calendar Year 1979, the SADB cumulative percentage is 157.5%
        of Final Salary as of July 1, 2011.
          Under the proposed legislation, the additional, incremental percentage
        of Final Salary to be effective July 1, 2012 would be 3.0%.
          FINANCIAL IMPACT - ACTUARIAL PRESENT VALUES OF BENEFITS ("APVB"): With
        respect to NYCRS members under the actuarial assumptions and methods  as
        noted  herein, the enactment of this proposed legislation would increase

        APVB by approximately $25.4 million as of June 30, 2012.
          FINANCIAL IMPACT - EMPLOYER PAYMENTS: With respect to  the  NYCRS,  as
        these  SADB are provided on a pay-as-you-go basis, the additional annual
        employer payments expected to be paid during  the  first  year,  if  the
        proposed legislation is enacted, would equal approximately $2.4 million.
        A. 9116--A                          5
 
          Note: These additional payments represent an increase of approximately
        4.6% in the estimated SADB payments during the first year.
          The SADB payments are made by the NYCRS who are reimbursed by the City
        who is then reimbursed by the State of New York.
          OTHER  COSTS: The enactment of this proposed legislation would also be
        expected to result in modest increases  in  administrative  expenses  of

        NYCERS, POLICE, FIRE, the employers and certain New York City agencies.
          CENSUS DATA: The financial impact of the proposed legislation is based
        upon  the census data for such widows, widowers and children provided by
        the NYCRS and adjusted, as necessary, to prepare  the  computations  and
        for consistency with other data.
          The  following  table  shows,  by  Retirement  System,  the  number of
        deceased members with eligible survivors as of June  30,  2011  and  the
        estimated  annual  SADB rate prior to the increase proposed to be effec-
        tive as of July 1, 2012.
 
                                         Table 1
                          SADB Census Data as of June 30, 2011
                                      ($ Millions)
                                Number of            Annual SADB Rate
                                Deceased Members     Prior to Proposed

                                with Eligible        July 1, 2012
        Retirement System       Survivors            Increase
 
        NYCERS                   31                  $ 1.3
        POLICE                  306                   15.0
        FIRE                    614                   35.9
        Total                   951                  $52.2
 
          ACTUARIAL ASSUMPTIONS AND METHODS: Additional APVB have been  computed
        based  on  the  actuarial assumptions and methods in effect for the June
        30, 2010 (Lag) actuarial valuations of NYCERS, POLICE and FIRE  used  to
        determine  the  Preliminary  Fiscal  Year  2012  employer contributions,
        including an Actuarial Interest Rate  ("AIR")  assumption  of  8.0%  per
        annum.
          The  demographic  actuarial  assumptions  were adopted by the Board of
        Trustees of each NYCRS during Fiscal Year 2006 and  the  AIR  assumption

        was enacted by the New York State Legislature and Governor and continues
        in effect.
          POTENTIAL  CHANGES IN ACTUARIAL ASSUMPTIONS AND METHODS: The impact of
        enactment of the proposed legislation provided in this Fiscal  Note  has
        been  based  on  the  current  actuarial assumptions and methods used to
        determine employer contributions to the NYCRS.
          However, based, in part, on the results of experience studies mandated
        by the New York City Charter, the Actuary has proposed new  packages  of
        actuarial  assumptions  and  methods  for  use  in  determining employer
        contributions to NYCRS  for  Fiscal  Year  2012  and  after.  Therefore,
        current  actuarial  assumptions  no  longer represent the Actuary's best
        estimates of future experience.
          It is anticipated that the APVB  determined  under  the  proposed  new

        packages  of  actuarial  assumptions  and methods will increase compared
        with the APVB determined under current actuarial assumptions  and  meth-
        ods.
          Finally,  the actuarial assumptions currently employed for determining
        employer contributions do not represent risk-adjusted,  economic  evalu-
        ations.  Such  risk-adjusted,  economic  evaluations  could, for certain
        A. 9116--A                          6
 
        components of the proposed  legislation,  produce  results  that  differ
        significantly from the results shown herein.
          STATEMENT  OF ACTUARIAL OPINION: I, Robert C. North, Jr., am the Chief
        Actuary for the New York City Retirement Systems. I am a Fellow  of  the
        Society  of Actuaries and a Member of the American Academy of Actuaries.
        I meet the Qualification Standards of the American Academy of  Actuaries

        to render the actuarial opinion continued herein.
          FISCAL  NOTE  IDENTIFICATION:  This  estimate is intended for use only
        during the 2012 Legislative Session. It is Fiscal  Note  2012-05,  dated
        February  29,  2012, prepared by the Chief Actuary for the New York City
        Employees' Retirement System, the New York City Police Pension Fund  and
        the New York City Fire Department Pension Fund.